South Korea’s Fair Trade Commission (KFTC) is investigating major international platforms. Companies under scrutiny include Google and Meta from the United States, and AliExpress (Ali) and Temu from China. The KFTC is concerned these platforms may have harmed advertising market competition or failed to protect consumers from undelivered or counterfeit products. Furthermore, the delay in passing the Platform Competition Promotion Act (Platform Act), aimed at regulating these companies, has raised worries about potential bypassing of platform regulations.
Reports from the industry on Mar. 10 indicate that the KFTC is examining whether Google has misused its dominant position in the online advertising sector to impede competition. The investigation focuses on whether Google has obstructed new entrants into the market or compelled them to adopt its advertising platform.
Google sells online advertisements directly and serves as a mediator between advertisers and publishers. It facilitates ad sales through its Ad Exchange (AdX), which links advertisers with publishers, and Google Ads, a tool for purchasing ads.
In a move similar to issuing an indictment, the KFTC sent an examination report to Meta, which runs Instagram and Facebook, late last year. The report accused Meta of violating Korea’s e-commerce Act by failing to adequately connect between affected consumers and relevant agencies, such as the Korea Consumer Agency, when purchases made on Instagram failed to be delivered as promised. The KFTC is expected to determine punitive measures this year.
Furthermore, the KFTC has recently started investigating Ali, a leading e-commerce platform in China, following reports of Chinese consumers encountering counterfeit products. There are concerns that Ali needs more resources and staffing to address consumer complaints effectively. The authorities are reportedly preparing to investigate other Chinese e-commerce firms, including Temu.
Additionally, the KFTC intends to promote a voluntary agreement obliging all international dropshipping platforms, such as Amazon and Ali, to eliminate counterfeit and dangerous goods proactively. Under existing regulations, these platforms must handle consumer disputes. However, they are not directly accountable for the products sold. Through the proposed voluntary agreement, platforms like Amazon would be mandated to enhance their internal processes to screen out problematic items.
